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PaperclipPerfector  3mo ago (text post)   32142 thread views

Culture War Roundup for the week of July 7, 2025

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This hasn't been my experience coming from a low-trust society, where everyone quickly learns to keep their hand on their wallet, and grow extra eyes all around their head.

And in this society, if a stranger approached you, introduced themselves as an entrepreneur, and offered to let you in on the ground floor of their operation for a small loan of million dollars, would you consider taking them up on the offer? Of course not - you'd assume they were a scam artist trying to rip you off. The only place someone would take them up on the offer is in an environment in which most people are assumed to be trustworthy, which in turn means the only place a scam artist would attempt it is in an environment in which most people are assumed to be trustworthy: in other words, fraud is impossible in a low-trust society.

Did this happen, by any chance, because there was very little fraud in Montreal Vancouver in years prior, and people were much less cautious with their money because their priors about trustworthiness were outdated? Did they start being more cautious about fraud specifically after it turned out that the expected cost of preempting fraud is lower than the expected cost of falling victim to it?

Of course, and the book catalogues many examples of boom-bust cycles of the type you're describing. A high-trust society (or subculture, or community) is founded -> scam artists get wind of this and exploit it for all the alpha it's worth -> after a few successful frauds, people start getting a lot more cautious and risk-averse -> realising that it's no longer a high-trust society, the scam artists depart for greener pastures. None of this even seems counterintuitive to me, it just seems like basic economics.

Of course not - you'd assume they were a scam artist trying to rip you off. The only place someone would take them up on the offer is in an environment in which most people are assumed to be trustworthy, which in turn means the only place a scam artist would attempt it is in an environment in which most people are assumed to be trustworthy: in other words, fraud is impossible in a low-trust society.

This is completely false. It doesn't surprise me, as westerners don't really grok low-trust societies, even the ones that acknowledge their existence (because hilariously there's quite a few who think doing so is racist).

What you're saying is the equivalent of believing that a predator can only successfully hunt if you transfer him it to Quokka Island. Quokka Island will appear to one as an all-you-can-eat buffet, but It's obvious predators survive and thrive quite well in environments where the prey is adapted to it's existence, it's just that they're subject to "you win some, you lose some" dynamics. In the case of scams, all it means is that they have to put more effort into appearances of legitimacy. To someone from a low-trust society, a high-trust one does not appear as "the only place where fraud is possible", it appears as one where the population hasn't bothered to put up the most basic defenses.

None of this even seems counterintuitive to me, it just seems like basic economics.

The part that's counter-intuitive, and perhaps deceptive, is where you/he claims that tolerating fraud is the price for a high-trust society. No amount of tolerance will turn a low-trust society into a high-trust one. What needs to happen is the purging scammers, once that's done, people lower their guard naturally. They don't "tolerate" fraud, it just happens so rarely, it hardly ever enters their thoughts.

In the case of scams, all it means is that they have to put more effort into appearances of legitimacy.

I think we might be talking past each other. I've been using "high-trust society" and "high-trust country" kind of interchangeably, but I think more specificity is called for. What I'm really arguing (and what I take Davies to be arguing) is that fraud can only take place within a high-trust community. That is, a country might be low-trust on the whole, but there might be enclaves within that country in which the members enjoy a presumption of trust with one another (social clubs, religious communities, voluntary organisations etc.). It is within these communities in which fraud and scams will occur in countries which are otherwise low-trust. This, I think, is what you're getting at with "putting more effort into appearances of legitimacy": scam artists must consciously infiltrate these high-trust communities, and this may be more difficult in a low-trust country than in a high-trust one (as the members of a high-trust community within an otherwise low-trust country will be doubly suspicious of outsiders).

I think you and @ArjinFerman are both wrong about the point. The optimal amount of fraud is not zero is about how as you eliminate fraud and increase social trust you increase the incentive to fraud and the marginal cost of reducing fraud rises asymptotically such that the last little bit of fraud isn't worth the squeeze. The point isn't that you tolerate fraud as in not police it, it's that you police it but you don't turn panopticon to go from 10 cases of fraud across the whole population to zero. You tolerate it in that you accept cases won't be zero, not that you don't do every reasonably cost effective thing you can do to reduce it.

he point isn't that you tolerate fraud as in not police it, it's that you police it but you don't turn panopticon to go from 10 cases of fraud across the whole population to zero.

I don't know if this is quite right. It's not that high-trust societies police fraud just as intensely as low-trust ones, but decide not to got the final mile. They actually police fraud much less than low-trust ones, take people at their word and generally assume their good faith. This is kind of the definition of a high-trust society, and it's also been matched by my experience visiting them.

They actually police fraud much less than low-trust ones, take people at their word and generally assume their good faith.

This is an unstable situation, though, unless fraudsters actually are punished a good bit of the time. If they prosper, your high-trust society days are numbered as the chumps figure out they're chumps and stop trusting and/or turn to fraud themselves.

If we're talking about some less-than-Dunbar's number small community, that's pretty easy, if Aaron Stevenson Stoltzfus invents lying in some small naive Amish community, then even if he doesn't get formally punished (which he likely would be, the Amish not actually being naive), word's going to get around and no one is going to trust him. Anything larger and it's a lot more difficult.

What I'm really arguing (and what I take Davies to be arguing) is that fraud can only take place within a high-trust community. That is, a country might be low-trust on the whole, but there might be enclaves within that country in which the members enjoy a presumption of trust with one another (social clubs, religious communities, voluntary organisations etc.). It is within these communities in which fraud and scams will occur in countries which are otherwise low-trust.

I don't think we're talking past each other, I just disagree with yours / Davies' core thesis. No, that's not how it works at all. There are scams and frauds in Russia, and there are essentially no high-trust communities there. All that happens is that scammers have to come up with new tricks that other people haven't heard of yet, and so don't know to be on the lookout for.

A community that doesn't lock it's doors is high-trust. If they get burgled, and start locking up it makes them low(er) trust. A burglar learning how to pick locks does not magically make the community high(er)-trust.

What I'm really arguing (and what I take Davies to be arguing) is that fraud can only take place within a high-trust community.

This isn't so; fraud takes place all the time in low-trust communities.

Of course not - you'd assume they were a scam artist trying to rip you off.

If a total stranger walked up to me and offered me this amazing chance to get in on the ground floor, but I have to take it up now or the opportunity will be gone, of course I'd assume they were a scammer and I don't live in a country that is particularly corrupt.

the only place a scam artist would attempt it is in an environment in which most people are assumed to be trustworthy

Or greedy. This is how con artists work, after all: appealing to the greed and cupidity and stupidity of the mark, who thinks they are too smart to be easily fooled and who is just venal enough that they won't look a gift horse in the mouth when the prospect of easy riches is dangled before them.

None of this even seems counterintuitive to me, it just seems like basic economics.

Yeah, that's common sense. But (at least by this example) the book seems to be trying to sell itself by dressing up common-sense observations in 'counter-intuitive' ways in order to seem edgy and new and worth buying for its insights.

Old boring way of putting this: A fool and his money are soon parted Fancy new pop-business book way of putting this: Did you know the best amount of fraud is "some"? Bet ya didn't!

EDIT: Reading the reviews on the Amazon site, it seems to be less that this author has a deep economic theory and more that he's concluding "since fraud of some sort always happens, and has always happened throughout human history, then it must have some sort of purpose":

"It is highly unlikely that the optimal level of fraud is zero." (Pg. 227.) " ...when something keeps happening in different times and places, it's likely to be an equilibrium phenomenon linked to the deep underlying economic structure." (Pg. 157.) The event described "happens so often and reproduces itself so exactly that it's got to reflect a fairly deep and ubiquitous incentive problem which will be very difficult to remove."

There may be some point there about evolutionary history and why we are wired to take advantage of others, but it is less to do with economics and more to do with "this is how humans are". You could make the same point about "it is highly unlikely the optimal level of murder/rape/beating children to death is zero". Some small fraction of people throughout history have always beaten children to death! This is just the price of living in a high-trust society!

You could make the same point about "it is highly unlikely the optimal level of murder/rape/beating children to death is zero".

yes_chad.png. See this sketch: there comes a point where the marginal cost of further investment in child protection is greater than the expected return, and those resources would be better allocated elsewhere. No one thinks that spending the entire annual budget to ensure that not a single child dies a premature violent death is a sensible way to allocate resources, which implicitly means that there is some amount of premature violent death of children we are collectively willing to tolerate as the price of doing business. Alternatively, a country in which child murder literally never happens probably curtails its citizens' liberties so aggressively that it would be profoundly undesirable to live there for other reasons.

Maybe you think this point is so trivial and obvious as to be hardly worth mentioning, but I actually don't think it is. During Covid, I encountered plenty of people who really did claim to believe that there was no amount of economic hardship they didn't think it was worthwhile enduring if it meant a few people in their eighties got to live an extra year or two.

Otoh it turned out that the optimal level of smallpox was in fact 0. Don't confuse "eliminating this bad thing isn't worth infinite resources" with "eliminating this bad thing requires infinite resources".

Fair point. I do, however, feel reasonably confident that even if we devoted 100% of a country's budget to preventing e.g. premature violent deaths of children in that country, we wouldn't be successful and the side effects unrelated to premature violent deaths of children would be disastrous.

Your smallpox example reminds me of an old post by Scott:

See, my terrible lecture on ADHD suggested several reasons for the increasing prevalence of the disease. Of these I remember two: the spiritual desert of modern adolescence, and insufficient iron in the diet. And I remember thinking “Man, I hope it’s the iron one, because that seems a lot easier to fix.”

Eliminating a deadly microorganism is a piece of piss. Eliminating the fact that people will sometimes tell other people things that they know to be untrue, and be believed? I don't even know where you'd begin.

which implicitly means that there is some amount of premature violent death of children we are collectively willing to tolerate as the price of doing business

I hope it is with you in your social circle as with the anarchist in "The Man Who Was Thursday" 😁

"I preached blood and murder to those women day and night, and—by God!—they would let me wheel their perambulators.”

Though it would be a unique selling point for a creche or daycare: "Some small number of premature violent death may occur on these premises, kindly remember that, should it happen to your children, you are helping preserve our liberties".

Those daycares exist all over the place. They're called Scout camps, of which there are hundreds; rock climbing gyms of which there are nearly one thousand and martial arts gyms of which there are over 40,000 most of which run various kids programs and make their money that way; more than one million kids play tackle football, mostly boys, while more than a million girls compete in horseback riding.

Everyone knows there are risks in those activities, yet place their kids in them anyway. Everyone who participated in them knows someone maimed or killed. But they're wildly popular.

I have absolutely no idea what point you're trying to make.

Just that in the week where there's new stories about the young girls drowned in the Texas floods, a statement about "a certain amount of violent deaths of children happens and we shouldn't get our knickers in a twist over that" sounds a little tone-deaf.

Good thing that's not what I said, so.

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